Collusion: Murray & Roberts reveals names of 4 projects

2013-11-06 14:49

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The Coega harbor, the Cape Town Convention Centre, the Louis Trichardt prison and a mining project belonging to Scorpion Zinc in Botswana are all projects where Murray & Roberts colluded with fellow construction companies, the construction giant announced today at its AGM.

These four projects affected by collusion had not been made public up until now.

Murray & Roberts CEO Henry Laas announced this today after a question posed by shareholder activist Theo Botha.

Asked if Murray & Roberts would make public the details of four projects where it had found evidence of collusion, but for which it couldn’t be prosecuted by the competition authorities, because of the time period since the anti-competitive conduct, Laas listed the four projects.

These projects built between 2001 and 2004, according to Laas, cannot be subject to prosecution by the competition authorities.

According to lawyer Charles Abrahams of law firm Abrahams Kiewitz, these projects that are not part of the Competition Commission’s fast-track settlement programme, cannot be the subject of civil litigation either, so the affected clients which are various levels of government and the Scorpion Zinc mining company cannot recoup damages caused by the collusion.

Murray & Roberts settled with the commission earlier in the year, agreeing to pay a fine of R309 million relating to 17 transgressions of the Competition Act.

Of these seventeen, Murray & Roberts was the successful tenderer on seven of the projects and Laas admitted earlier in the year that the profit that the group had made out of these seven projects was R173 million.

This transparency from Murray & Roberts is in stark contrast to construction firm Aveng, which held its AGM last week.

When asked by Botha last week to reveal details of 48 undisclosed projects, which were affected by collusion, Aveng’s chairperson Angus Brand said it was not in the company’s interests to disclose the projects details.

Angus reportedly stated that if a company approached them they would discuss the projects, but their legal advice was not to disclose them in a list form.

Aveng paid a fine of R307 million for 57 transgressions of the competition act.

Laas announced today that Murray & Roberts still had five outstanding matters that it was attempting to settle with the Competition Commission and said that a settlement proposal had been sent to the commission and the company was still awaiting a response.

Laas also announced that Murray & Roberts had asked the commission for evidence that implicates six former executives in collusion and once it has received the evidence it will take legal advice on further action it could take against the individuals.

Murray & Roberts chairperson Mahlape Sello said it was important to remember that this evidence had not been tested in a court of law and this will have an impact on what action can be taken.

“As things stand today I can assure you that there is no collusive conduct taking place in Murray & Roberts,” said Laas. “We have rooted it out.”

Asked if bonuses paid to current executives should be clawed back as the performance of the company was boosted by the collusion, Sello said that it would be “grossly unfair” to do that as the executives had no knowledge of the collusive conduct.

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